“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far
more money has been lost by investors in preparing for corrections, or anticipating
corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
“The trouble with trade wars is that once they begin they
can quickly escalate and get out of control. All the more so when politicians
are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves
as if his manhood is implicated because a foreign nation won’t take his nasty
border taxes lying down. We said from the beginning that this North American
trade war is the dumbest in history, and we were being kind.” – WSJ Editorial
Board.
MOUNTING DEBT MAY LEAD TO SHOCKING DEVELOPMENTS (CNBC)
“The first thing is the debt issue, we have a very severe
supply-demand problem,” Bridgewater founder Ray Dalio told CNBC’s Sara Eisen at
CONVERGE LIVE in Singapore regarding U.S. debt. Dalio, who was speaking on the
same panel as Salesforce CEO Marc Benioff, said this will require the White
House to sell a quantity of debt the world is just not going to want to buy. “That’s
a set of circumstances that is imminent, OK? That is paramount importance,” he
said, adding that most people don’t understand the mechanics of debt.” Story
at...
https://www.cnbc.com/2025/03/12/ray-dalio-warns-growing-us-debt-will-lead-to-shocking-developments.html
My cmt: As demand to buy treasury bonds declines,
interest rates will rise and kill the economy. Unchecked, the existence of our country
will be at risk.
CPI / CORE CPI (CNBC)
“The consumer
price index, a wide-ranging measure of costs across the U.S. economy,
ticked up a seasonally adjusted 0.2% for the month, putting the annual
inflation rate at 2.8%, according to the Labor Department agency. The all-item
CPI had increased 0.5% in January... Excluding food and energy prices, the core
CPI also rose 0.2% on the month and was at 3.1% on a 12-month basis, the lowest
reading since April 2021. The core CPI had climbed 0.4% in January.” Story
at...
https://www.cnbc.com/2025/03/12/cpi-inflation-report-february-2025.html
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 1.4 million barrels from the
previous week. At 435.2 million barrels, U.S. crude oil inventories are about
5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Wednesday the S&P 500 rose about 0.5% to 5599.
-VIX fell about 10% to 24.23.
-The yield on the 10-year Treasury rose (compared to
about this time, prior trading day) to 4.316%.
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 18 gave Bear-signs
and 3 were Bullish. The rest are neutral. (It is normal to have a lot of
neutral indicators since many of the indicators are top or bottom indicators
that will signal only at extremes.)
TODAY’S COMMENT
As of today’s close, the S&P 500 was down 8.5% from
its all-time high. The S&P 500 closed 2.4% below its 200-day, moving
average.
The daily, bull-bear spread of 50-indicators declined to
a Bearish -15 (15 more Bear indicators than Bull indicators). The
10-dMA of the spread continues to move higher – that is a bullish sign, but
there has been no confirmation of this bullish trend so far.
We got the stock bounce Wednesday that RSI and Bollinger
Bands had suggested. They were both oversold Tuesday. Bollinger Bands aren’t
oversold today.
Unchanged-volume was again very high. As I’ve often said
(and you’re probably tired of reading it), many believe that this indicator
suggests investor confusion at market turning points. Are markets turning back
up? It’s always possible, but the best we can say is that investors are
confused. “High-unchanged-volume” is not one of my indicators because it is
often wrong.
Down volume has been falling at the recent lows,
suggesting reduced selling. Unfortunately, the “Buying-Pressure minus Selling
Pressure” indicator (below) is still falling so that indicator is not yet confirming
reduced selling.
This indicator is based on my best guess of the Lowry Research
methodology. Lowry Research is one of the oldest stock market, technical analysis/investment
companies. They do not publish their methodology, however, there are
descriptions on the internet. One clear difference is that their model is based
only on publicly traded companies while mine is based on all issues listed on
the NYSE.
Today was day 15 in the decline. Jeffrey Saut has
suggested that these declines tend to last 17 to 25 sessions unless markets are
sliding into a significant, bear-market. My own numbers agree: 32-days (about
25-sessions) from top to bottom is average for declines less than 10%. When declines
get larger than 10%, the length of correction (top to bottom) can be more than 2-months,
excluding major bear markets that can take years to resolve. (As always, there are exceptions.) We can’t completely
rule out that this is the start of a bear-market, but the odds of that seem
low.
BOTTOM LINE
No bottom yet. I am bearish with a very conservative
allocation of only about 30% invested in stock holdings.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking
follows:
The top ranked ETF receives
100%. The rest are then ranked based on their momentum relative to the leading
ETF.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
DOW STOCKS - TODAY’S MOMENTUM RANKING
OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked Stock receives
100%. The rest are then ranked based on their momentum relative to the leading Stock.
For more details, see NTSM
Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals declined to SELL again. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
...My current invested
position is about 30% stocks, including stock mutual funds and ETFs – extreme
bearish. (I’ll need to recalculate the %.) 50% invested in stocks is a normal
position. (75% is my max stock allocation when I am confident that markets will
continue higher; 30% in stocks is my Bear market position.)
I trade about 15-20% of the total portfolio using the
momentum-based analysis I provide here. When I see bullish signs, I add a lot more
stocks to the portfolio, usually by using an S&P 500 ETF as I did back in
October 2022 and 2023.
